The American Recovery and Reinvestment Act (ARRA)

Frequently Asked Questions

President Obama signed the American Recovery and Reinvestment Act (ARRA) into law on February 17, 2009

When will ARRA funds be made available to City governments?

To date, the City of Milwaukee has been awarded approximately $50 million in ARRA grant funding. These funds will be used for crime prevention, community and economic development, energy and infrastructure, workforce development, public housing modernization, housing and homeless prevention and transportation programs.

  • Byrne Justice Assistance Grants - $5.7 million (will be used for police overtime, real time data reporting systems, vehicles and other equipment)
  • Community Development Block Grants - $4.5 million (will be used for job training and skilled labor apprenticeships related to the fields of urban forestry and building trades, graffiti mitigation and street improvements such as pedestrian lighting)
  • Homeless Assistance Grants - $6.9 million (will be used for rental vouchers for individuals and families facing homelessness and other housing relocation and stabilization services)
  • Public Housing Capital Fund - $10.3 million (will be used for modernizing public housing in need of repair)
  • Healthy Homes Grant - $874,000 (will be used for lead hazard reduction and asthma prevention in homes)
  • Energy Block Grants - $5.8 million (will be used for energy audits and to improve energy efficiency in homes and public and private buildings)
  • Surface Transportation Program (STP) Grants - $15.2 million (will be used for local arterial street and bridge projects)

As City government works to expend and access ARRA funds to generate economic activity, we must be mindful of the intent of the federal stimulus law. These funds are not a budget windfall nor are they a panacea to our current budget problems. The President and Vice President have warned us against building stimulus funding into city budgets.

Most of the direct funding that will come to Milwaukee in the form of formula grants will not come until the summer and fall months. The U. S. government is administering ARRA funds through existing programs and must approve expenditure plans by cities and other entities receiving stimulus dollars before funds are released. We have submitted or are in the process of submitting formal proposals that are still pending federal approval.

Why doesn’t government cut taxes instead of implementing massive government spending to solve our economic problems?

Simply put, massive problems generally require enormous solutions. Our nation is facing its toughest economic times since the Great Depression. In fact, 21.6 millions are unemployed and we need to act to put Americans back to work now.

To put it in local terms, the City of Milwaukee is the 22nd largest City in the United States and has a poverty rate of 25.2%, the 8th highest in the nation. The median income in Milwaukee is $39,125, which is substantially lower than the national median income of $50,740. Milwaukee’s unemployment rate is 11% and typically remains about 2 percentage points higher than the metropolitan area rate. During the period 1994 through 2005, Milwaukee ranked 46th among the 50 largest cities in job growth.

In light of our tough economic times, Milwaukee and other cities facing similar challenges need federal assistance. ARRA is an important first step to rebuilding our struggling economy. This new law will address the challenging economic times confronting our nation by providing tax cuts and unprecedented levels of federal funding to jump-start our economy and create and save jobs. In fact, approximately one third of the spending in ARRA comes in the form of tax relief.

It is also important to note that ARRA requires that stimulus funds be spent regardless of whether Milwaukee acts or not to expend these dollars. In light of the unprecedented levels of transparency and accountability that ARRA provides, I would much rather see these taxpayer dollars being spent in Milwaukee than being channeled to another city or state.

How will small businesses benefit from ARRA?

ARRA provides a number of tax incentives that benefit small businesses. Here is a summary of key ARRA tax provisions which impact businesses, large and small:

  • Bonus Depreciation: Allows businesses to recover the cost of capital expenditures over time according to a depreciation schedule. Extends the 50% special depreciation allowance that was available for 2008 to 2009.
  • Small Business Expensing: Allows small businesses to immediately write off the costs of capital expenses in the year of acquisition from $125,000 to $25,000 in lieu of recovering these costs over time through depreciation.
  • Small Business Loss Carry-backs: Increases cash flow by providing a five-year carry-back of 2008 net operating losses for small businesses.
  • Spurring Investments in Businesses: Spurs investments in small businesses by cutting the capital gains tax on investors on small businesses who buy stock (in the next two years) and retain it for more than five years.
  • 3% Government Withholding: Delays the mandate that federal, state and local governments withhold 3% of payments to businesses for goods and services.

The U. S. Small Business Administration (SBA) will receive approximately $730 million to assist struggling small businesses; $30 million of which will be used for temporary loan forgiveness and $30 million to expand SBA’s microloan program.

How will ARRA benefit individuals and families?

ARRA provides a number of tax incentives for individuals and families. Here is a summary of key ARRA tax provisions of benefit to average citizens:

  • Making Work Pay: Provides immediate and sustained tax relief to about 95 percent of workers through a refundable tax credit of $400 to individuals and $800 to couples.
  • First-Time Homebuyers: Increases the first-time homebuyers tax credit from $7,500 to $8,000.
  • Deduction for Vehicle Purchases: Provides a tax credit deduction for state and local sales taxes paid on the purchase of new cars including light trucks and SUVs.
  • Education Tax Credit: Provides financial assistance for individuals seeking a college education. Taxpayers will receive up a tax credit of up to $2,500 of the cost of college tuition and related expenses.
  • Child Care Credit: Cuts taxes for families through an expansion of the child tax credit to the extent of 15 percent of the taxpayer’s earned income of excess of $8,500.
  • Earned Income Credit: Expands the Earned Income Tax Credit (EITC) to 45 percent of the family’s first $12,570 of earned income for families with three or more children.

How can non-profit organizations benefit from ARRA?

ARRA funding will be administered by federal, state and local governments to non-profits and other eligible organizations, primarily in the form of competitive grants. Funds will be distributed through existing agencies and programs.

To track federal funding opportunities, please visit the “Opportunities” section of the City of Milwaukee website where you can search online for many kinds of financial opportunities offered by the United States government. Organizations can also apply for grant opportunities related to ARRA, by using the “Find Recovery Act Opportunities” option on www.grants.gov.

To track opportunities at the state level, please visit the State of Wisconsin’s website at www.recovery.wisconsin.gov. To track opportunities at the city level, please visit the City of Milwaukee government website at www.milwaukee.gov/arra.

How will ARRA help connect citizens to job training and job placement services?

The Milwaukee Area Workforce Investment Board (MAWIB) will receive approximately $8 million in ARRA Workforce Investment Act (WIA) funds to advance job training and job placement in Milwaukee. In addition to rebuilding our struggling economy, a primary goal of ARRA is increasing jobs and putting Americans back to work. Here is the breakdown of funding allocated to the Milwaukee area:

  • Youth Summer/Year Round Employment, Training and Support Services: $3.8 million.
  • Adult Job Training, Placement Assistance and Support Services: $1.4 million.
  • Dislocated Worker Job Training, Placement Assistance and Support Services: $1.9 million

As the planning, coordinating and monitoring workforce development agency for the Milwaukee area, MAWIB follows guidelines developed by the federal and state agencies that distribute WIA dollars. Those guidelines have not changed with ARRA. Currently, funds are already being distributed for workforce development in all the categories noted above. However, these additional funds will allow MAWIB to enhance its service including more than doubling its capacity to provide jobs for youth between the ages of 18-24 this summer.

MAWIB will also receive $807,596 million to effectively administer programs created by these ARRA dollars. If you reside in the Milwaukee area and are in need of job training, placement and support services, please contact MAWIB at 414-270-1700. You can also visit MAWIB’s website at www.milwaukeepic.com to learn more about services and programs available for local residents.

How will persons with disabilities benefit from ARRA?

The economic stimulus package contains substantial assistance for people with disabilities. Following is a list of key disability specific programs offered under ARRA:

  • Health Care: Wisconsin will soon receive its first payment of additional Medicaid funding under ARRA. The $163 million the State of Wisconsin is slated to receive will be used to help pay the cost of health care for the poor (including persons with disabilities). Additional payments will come throughout 2009 and into next year.
  • Special Education: Milwaukee Public Schools will receive $30 million for Special Education Programs to improve educational opportunities for disabled children. In addition, to elementary and postsecondary education, funding is included for early intervention and pre-school programs.
  • Social Security: A one time payment of $250 will be provided to people who receive Supplemental Security Income (SSI).
  • Independent Living: $140 million is available to Centers for Independent Living to assist people with disabilities to live independently in their communities.
  • Public Housing/Supportive Housing: The Housing Authority of the City of Milwaukee (HACM) will receive $10.3 million to repair and modernize public housing. HACM oversees Supportive Programs for Persons with Disabilities. The Milwaukee Continuum of Care (COC) will also assist in administering a portion of the $6.9 million in homeless prevention funds the City of Milwaukee will receive to assist single people with disabilities facing homelessness.

The City of Milwaukee is committed to abiding by all of the requirements of the Americans with Disabilities Act and will continue to support federal spending bills that ensure the highest level of funding possible for disability-related programs.

How will homeless assistance grants be invested?

The City of Milwaukee will receive $6.9 million in ARRA funds for the Homeless Prevention and Rapid Re-Housing Program (HPRP). These funds will be used to provide assistance and services to prevent individuals and families from becoming homeless and to help those who are experiencing homelessness to quickly be re-housed and stabilized.

The Milwaukee Continuum of Care (COC), which consists of 85 organizations charged with the coordination of U. S. Department of Housing and Urban Development (HUD) Supportive Housing program funding, will partner with the City to administer these dollars. Milwaukee’s HPRP plan contains the following seven components: 1) Family Rapid Re-Housing; 2) Rapid Re-Housing for Youth Ages 18-25; 3) Rapid Re-Housing for Single Adults; 4) Prevention of Homelessness Related to Foreclosures; 5) Legal Assistance to Prevention Eviction; 6) Landlord/Tenant Mediation; and 7) Direct Assistance for Eviction Prevention and Case Management.

Each of the HPRP components has a detailed program plan including target populations, goals and objectives, and outcomes. For the specific details, please visit www.milwaukee.gov/arra and click on the section of the website that highlights ARRA funds “By Formula.”

Will ARRA funding be available for local roads and streets?

The City of Milwaukee will directly receive $15.2 million of the $38.7 million in ARRA Surface Transportation Program (STP) funds set aside for the Milwaukee Urbanized Area (MUA) for arterial street and bridge projects. The MUA consists on all of Milwaukee county, the majority of Waukesha county, and parts of Washington and Ozaukee counties.

The City is considering funding projects with these funds that are “ready to go “and can be completed within the timeframe required by ARRA including:

  • W. State St. (N. 27th St. to N. 17th St.) - 2009 construction start
  • W. Lisbon Av. (N. Sherman Blvd. to Soo Line RR) - 2009 construction start
  • W. Oklahoma Av. (S. 72nd St. to S. 60th St.) - 2009 construction start
  • S. Cesar Chavez Drive (W. Greenfield Ave. to W. Pierce St.) - 2010 construction start
  • N. Sherman Blvd. Bridge (over W. Silver Spring Dr.) - 2010 construction start
  • N. Sherman Blvd. (W. Silver Spring Dr. to W. Florist Ave.) - 2010 construction start
  • W. Vliet St. Bridge (over Canadian Pacific RR) - 2010 construction start
  • S. 6th St. Bridge (over Kinnickinnic River) - 2010 construction start
  • E/W Keefe Av. (N. Port Washington Ave. to N. Humboldt Dr.) - 2010 construction start
  • S. 1st St. (E. Lincoln Ave. to S. Kinnickinnic Ave.) - 2010 construction start

In addition, $3.6 million of Milwaukee County’s $6 million portion of STP funds will be allocated to a County project located within the City of Milwaukee (Mill Rd from N. 84th St. to N. 56th St.), resulting in nearly $19 million (49%) of the $38.7 million being spent within Milwaukee.

Also, since not all communities submitted projects or some communities submitted projects that were too large to be completed with their allocation, it was decided by representatives of the MUA that the resulting unused funds should be distributed for projects that could be started in 2009 and to other county or municipal projects that couldn't fit into a specific allocation of a smaller community. This resulted in Milwaukee County receiving $2 million for an additional project (possibly College Av. between Pennsylvania Av. to Packard Av.).

The City of Milwaukee Community Development Block Grant (CDBG) program will receive an additional $4.5 million in ARRA funds. Approximately $2.1 billion of the total will be used for streetscape activities within targeted income areas and other transportation improvements. Streetscape activities include enhanced pedestrian lighting and enhanced bus shelters.

Will ARRA funds be used to advance rail initiatives?

Approximately $8 billion will be available nationally to advance the development of high speed passenger rail and to improve inner-city passenger rail service. The process for applying for these funds will be highly competitive. The States for Passenger Rail Coalition estimates that there are over $1.5 billion in projects that are “ready to go” in transportation corridors across the nation.

The State of Wisconsin is expected to apply for ARRA funds that will be directed to the development of high speed passenger rail. In fact, Governor Jim Doyle has publicly stated that he will aggressively pursue these funds to advance the Midwest Rail Initiative (MRI), a project I strongly support. The goal of MRI is to build a high speed passenger rail line that can go from Chicago to Minneapolis with stops in Milwaukee and Madison. The plan also proposes an arm that would connect Green Bay to the Line through the Fox Valley.

I strongly support the Midwest Rail Initiative and will do everything I can to support the Governor in aggressively pursuing stimulus dollars for this vital economic development project. The MRI is a part of my vision for “A Comprehensive Transit Strategy” that will improve transit in Milwaukee and the region by: 1) strengthening our struggling bus system; 2) advancing rail initiatives; 3) enhancing connectivity of all modes of transportation; 4) meeting the demands of different users; and 5) providing seamless connectivity for the greater Milwaukee area.

Unfortunately, the City of Milwaukee and State of Wisconsin are ineligible to apply for ARRA funds that will be allocated to improve inner-city passenger rail because the funds will only be designated to existing systems. However, we are pursuing additional federal funds for this project and other regional transportation initiatives.

For more specific details on the American Recovery and Reinvestment Act (ARRA) or to obtain a list of key City government contacts who can answer additional questions you may have on specific ARRA topics, please visit the City of Milwaukee government website at www.milwaukee.gov/arra. 
 

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